Trial by fire
Born just a week after India gained independence, Indoco Remedies has witnessed and been a part of the trials and triumphs of the country’s pharma sector for the last seven decades. Now, as we gear up to celebrate the 71st anniversary of the day which marked the end of colonial rule in India, the company has grown steadily to become a well-known entity in the Indian pharma sector
Founded by late Govind Kare, Indoco Remedies was set up to import pharma formulations from Europe and distribute them in the Western India. However, the road ahead for the fledgling company in a newly liberated nation was no cake walk. Though it had a small pharma unit in Thane, Mumbai, most of Indoco’s operations were handled out of Goa which was in the midst of its struggle for liberation. This made it very difficult for the company to manage its operations.
Goa’s independence in 1961, ending Portuguese rule on the Gomantak heartland, proved to be a blessing to the company as well as it served to stabilise its operations. In 1963, when Suresh Kare, the founder’s son took charge as the Managing Director, the company’s annual turnover was around Rs 3 lakhs and had 30 employees on payroll, a loss-making entity.
It was now up to the new leader to turn the company’s fortunes and make it a profit-making venture. An uphill task in the business environment which existed in the country at that time. However, Suresh proved his mettle with hard work and business strategies that gradually put the company on the growth track. The government’s decision to favour indigenous players over the MNCs who had dominated the industry since independence also spurred the growth trajectory of the company.
The passage of the Indian Patent Act in 1970, which brought in the regime of ‘Process Patents’, the export initiatives taken by the industry in 1990s, liberalisation of the economy in 1991, opened up new growth avenues for domestic players. Indoco, helmed by an able leader was able to capitalise on the opportunities and emerge as a significant entity in an expanding landscape.
Charting a success story
After successfully spearheading the company as Chairman and Managing Director for five decades, in 2012, Suresh Kare handed over the management reigns of Indoco to the third generation – Aditi Kare Panandikar as Managing Director and Sundeep V Bambolkar as Jt Managing Director.
Speaking on the company’s strategies for growth, Kare Panandikar says, “Unlike most Indian pharma companies who commenced their business with APIs and then forward integrated into formulations, Indoco started with finished dosages and then forayed into API business as a backward integrated initiative to support its captive demand. Our employee strength grew gradually and today boasts of around 6000 employees, including skilled scientists. Today, the company is present in 55 countries and has crossed sales of $165 million.”
In 1974, Indoco commissioned its manufacturing unit at MIDC, Andheri. Today, the company has nine manufacturing facilities, six of which are for Finished Dosage Forms (FDFs) and three for APIs, supported by state-of-the-art R&D Centre and a CRO facility. In 2003, the company’s manufacturing facility in Goa received its first UK-MHRA approval and today, all its facilities have been approved by regulatory bodies like the US FDA, UK-MHRA, TGA-Australia, MCC-South Africa, etc.
Kare-Panandikar says, “Thanks to the strong infrastructure and a good customer base across the world, export business has been growing steadily and accounts for almost 45 per cent of Indoco’s total revenues. We have profit sharing arrangements with major generic companies in the US and have a large pipeline of products under approval in the niche ophthal segment. At Indoco, the regulated market product pipeline is selected very carefully and the company started preparing for product registrations in the injectable category for the next growth wave.”
M&As for progress
Due to the stress on manufacturing, increased regulatory hurdles and rising competition, the growth of the pharma industry has reached a saturation point. Indoco realised that organic growth alone may not be enough to reach the objectives set and inorganic growth through acquisitions is the need of the hour.
Indoco, though has primarily relied on organic growth, also has a track record of acquisitions. These acquisitions provided opportunities to diversify in different therapeutic segments and business areas. To start with, Indoco Remedies acquired Warren Pharmaceuticals Ltd (WPL) and Warren Laboratories Ltd (WLL) in the year 1999. Both these companies were operating as 100 per cent subsidiary companies of Indoco after acquisition and were merged with Indoco in 2002, into separate domestic marketing divisions. These companies were majorly operating in ophthalmic and dental therapeutic segment areas. Immediately after the acquisitions, Indoco used its acquired expertise to build a state-of-the-art facility to manufacture sterile products.
To enhance the company’s presence in the API segment, Indoco acquired an API company, Lanova Chem India, located at Patalganga. In the year 2004, Indoco acquired ‘Karvol Plus’, from Solvay Pharma India, to strengthen its respiratory therapeutic segment.
Recently, Indoco had two major acquisitions. The company acquired a Clinical Research Organisation (CRO) facility at Hyderabad from Piramal’s in 2015 and a solid dosage facility from Micro Labs in 2016 at Baddi. The AnaCipher CRO facility is spread over 30,000 sq ft and staffed by experienced professionals providing clinical trials solutions, including bioavailability and bioequivalence (BA/BE)/Phase /Phase II studies for pharma companies. With the smooth integration of these facilities, the company is now completely integrated with sufficient capacity to cater to demands from its customers and will remain a preferred partner, offering complete solutions to generic companies worldwide.
The above acquisitions show the far-sightedness of the management to invest in viable projects and boost the revenues through in-organic growth.
Explaining the rationale behind adopting this route to grow, Kare Panandikar stresses, “Besides, the M&A activities give the management a better insight in studying such opportunities and learning the art of integrating new business in the mainstream after acquisitions.
A strong brand
The brands built by Indoco over a period of time have today become recognised household names, viz., Febrex Plus, Cyclopam, Cital, Sensodent, ATM, Oxipod, etc. , Indoco’s domestic business generates more than 70 million prescriptions annually from around 4,65,000 doctors belonging to various specialties. Indoco has nine domestic marketing divisions with a strong brand portfolio in various therapeutic segments, like respiratory, anti-infective, dental care, pain management, gastro-intestinal, ophthalmic, cardiovascular, anti-diabetics, anti-obesity, etc. Top Indoco brands include Cyclopam, Febrex Plus, Sensodent-K, Oxipod, Cital, ATM, Cloben-G, Sensoform, Sensodent-KF, Karvol Plus, Glychek, Tuspel Plus, etc.
Indoco has also launched divisions such as AnaCipher and Xtend Industrial Designers & Engineers. The company’s international business is expected to grow speedily as ANDAs would be commercialised at regular intervals. EU approval of newly acquired solid dosages manufacturing facility at Baddi will also pave the way for higher growth in European market. While surging ahead in the regulated markets, Indoco is also consolidating its position in the emerging markets through active brand promotion. Robust pipeline in multiple dosage forms is expected to help the company expand its international business.
She sums up, “Expertise in research and development, backward integration in API in select molecules, own CRO set-up, excellence in finished dosages manufacturing and a strong customer base will ensure consistent growth in the company’s domestic as well as international business.”
Thus, Indoco has been a constant companion in India’s progress path and is living up to its motto of ‘Constantly Evolving and Consistently Excelling’.